Question 1

A differentiation-based competitive advantage

Accepted Answer

A)  nearly always is attached to the quality and service aspects of a company's product offering. 
B)  most usually is the result of highly effective marketing and advertising campaigns designed to build awareness and recognition of the product or service offering. 
C)  requires developing at least one distinctive competence that buyers consider valuable. 
D)  hinges on a company's success in developing top-of-the-line product features that will command the biggest price premium in the industry. 
E)  often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or noneconomic ways or (4) deliver value to customers by exploiting competitive capabilities that rivals can't match. 
A)  nearly always is attached to the quality and service aspects of a company's product offering. 
B)  most usually is the result of highly effective marketing and advertising campaigns designed to build awareness and recognition of the product or service offering. 
C)  requires developing at least one distinctive competence that buyers consider valuable. 
D)  hinges on a company's success in developing top-of-the-line product features that will command the biggest price premium in the industry. 
E)  often hinges on incorporating features that (1) raise the performance of the product or (2) lower the buyer's overall costs of using the company's product or (3) enhance buyer satisfaction in intangible or noneconomic ways or (4) deliver value to customers by exploiting competitive capabilities that rivals can't match. E

Question 2

The aim of the best-cost provider strategy is to create a competitive advantage by

Accepted Answer

A)  incorporating attractive or upscale product attributes at a lower cost than rivals. 
B)  offering buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. 
C)  attracting buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. 
D)  outcompeting rivals using low-cost provider strategies. 
E)  translating its best-cost status into achieving the highest profit margins of any firm in the industry. 
A)  incorporating attractive or upscale product attributes at a lower cost than rivals. 
B)  offering buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. 
C)  attracting buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. 
D)  outcompeting rivals using low-cost provider strategies. 
E)  translating its best-cost status into achieving the highest profit margins of any firm in the industry. A

Question 3

The objective of a best-cost provider strategy is to

Accepted Answer

A)  deliver superior value to buyers by satisfying their expectations on key quality/performance/features/service attributes and beating their expectations on price. 
B)  offer buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. 
C)  attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. 
D)  outcompete rivals using low-cost provider strategies. 
E)  translate its best-cost status into achieving the highest profit margins of any firm in the industry. 
A)  deliver superior value to buyers by satisfying their expectations on key quality/performance/features/service attributes and beating their expectations on price. 
B)  offer buyers the industry's best-performing product at the best cost and best (lowest) price in the industry. 
C)  attract buyers on the basis of having the industry's overall best-performing product at a price that is slightly below the industry-average price. 
D)  outcompete rivals using low-cost provider strategies. 
E)  translate its best-cost status into achieving the highest profit margins of any firm in the industry. A

Question 4

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when

Accepted Answer

A)  there are many ways to achieve product differentiation that buyers find appealing. 
B)  buyers use the product in a variety of different ways. 
C)  the offerings of rival firms are essentially identical, standardized, commodity-like products. 
D)  buyers have high switching costs in changing from one seller's product to another. 
E)  the market is composed of many buyer types, all with varying needs and expectations. 
A)  there are many ways to achieve product differentiation that buyers find appealing. 
B)  buyers use the product in a variety of different ways. 
C)  the offerings of rival firms are essentially identical, standardized, commodity-like products. 
D)  buyers have high switching costs in changing from one seller's product to another. 
E)  the market is composed of many buyer types, all with varying needs and expectations.

Question 5

A focused differentiation strategy aims at securing competitive advantage

Accepted Answer

A)  by providing niche members with a top-of-the-line product at a premium price. 
B)  by catering to buyers looking for an upscale product at an attractively low price. 
C)  with a product or service offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers. 
D)  by developing product attributes that no other company in the industry has. 
E)  by convincing affluent buyers that the company has a true world-class product. 
A)  by providing niche members with a top-of-the-line product at a premium price. 
B)  by catering to buyers looking for an upscale product at an attractively low price. 
C)  with a product or service offering carefully designed to appeal to the unique preferences and needs of a narrow, well-defined group of buyers. 
D)  by developing product attributes that no other company in the industry has. 
E)  by convincing affluent buyers that the company has a true world-class product.

Question 6

A broad differentiation strategy works best in situations where

Accepted Answer

A)  technological change is slow paced and new or improved products are infrequent. 
B)  buyer needs and uses of the product are very similar. 
C)  buyers incur low costs in switching their purchases to rival brands. 
D)  buyers have a low degree of bargaining power and purchase the product frequently. 
E)  technological change is fast paced and competition revolves around rapidly evolving product features. 
A)  technological change is slow paced and new or improved products are infrequent. 
B)  buyer needs and uses of the product are very similar. 
C)  buyers incur low costs in switching their purchases to rival brands. 
D)  buyers have a low degree of bargaining power and purchase the product frequently. 
E)  technological change is fast paced and competition revolves around rapidly evolving product features.

Question 7

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

Accepted Answer

A)  Striving to capture all available economies of scale 
B)  Trying to operate facilities at full capacity 
C)  Taking full advantage of experience and learning curve effects 
D)  Improving supply chain efficiency 
E)  Redesigning products to eliminate features that might have market appeal, but excessively increase production costs 
A)  Striving to capture all available economies of scale 
B)  Trying to operate facilities at full capacity 
C)  Taking full advantage of experience and learning curve effects 
D)  Improving supply chain efficiency 
E)  Redesigning products to eliminate features that might have market appeal, but excessively increase production costs

Question 8

A competitive strategy of striving to be the low-cost provider is particularly attractive when

Accepted Answer

A)  buyers are not price sensitive. 
B)  the industry is made up of a large number or equal-sized rivals. 
C)  there are many ways to achieve product differentiation that have value to buyers. 
D)  price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers. 
E)  switching costs are high, price competition is strong, and buyers tend to use the industry's products in many different ways. 
A)  buyers are not price sensitive. 
B)  the industry is made up of a large number or equal-sized rivals. 
C)  there are many ways to achieve product differentiation that have value to buyers. 
D)  price competition is especially vigorous, buyers have low switching costs, and the majority of industry sales are made to a few, large volume buyers. 
E)  switching costs are high, price competition is strong, and buyers tend to use the industry's products in many different ways.

Question 9

The chief difference between a low-cost leader strategy and a focused low-cost strategy is

Accepted Answer

A)  whether the product is strongly differentiated or weakly differentiated from rivals. 
B)  the degree of bargaining power that buyers have. 
C)  the size of the buyer group that a company is trying to appeal to. 
D)  the production methods being used to achieve a low-cost competitive advantage. 
E)  the number of upscale attributes incorporated into the product offering. 
A)  whether the product is strongly differentiated or weakly differentiated from rivals. 
B)  the degree of bargaining power that buyers have. 
C)  the size of the buyer group that a company is trying to appeal to. 
D)  the production methods being used to achieve a low-cost competitive advantage. 
E)  the number of upscale attributes incorporated into the product offering.

Question 10

A competitive strategy to be the low-cost provider in an industry works well when

Accepted Answer

A)  price competition among rival sellers is especially vigorous. 
B)  commodity-based product prevails and minimal differentiation exists. 
C)  buyers incur low costs in switching their purchases from one seller/brand to another. 
D)  industry newcomers use low introductory prices to attract buyers and build a customer base. 
E)  All of these. 
A)  price competition among rival sellers is especially vigorous. 
B)  commodity-based product prevails and minimal differentiation exists. 
C)  buyers incur low costs in switching their purchases from one seller/brand to another. 
D)  industry newcomers use low introductory prices to attract buyers and build a customer base. 
E)  All of these.

Question 11

The big danger or risk of an unsound best-cost provider strategy is

Accepted Answer

A)  that buyers will be highly skeptical about paying a relatively low price for upscale attributes/features. 
B)  not establishing strong alliances and partnerships with key suppliers. 
C)  that low-cost leaders will be able to steal away some customers on the basis of a lower price and high-end differentiators will be able to steal away customers with the appeal of better product attributes. 
D)  that it will be unable to achieve top-notch quality at a rock-bottom cost. 
E)  becoming too highly integrated and not relying enough on outsourcing. 
A)  that buyers will be highly skeptical about paying a relatively low price for upscale attributes/features. 
B)  not establishing strong alliances and partnerships with key suppliers. 
C)  that low-cost leaders will be able to steal away some customers on the basis of a lower price and high-end differentiators will be able to steal away customers with the appeal of better product attributes. 
D)  that it will be unable to achieve top-notch quality at a rock-bottom cost. 
E)  becoming too highly integrated and not relying enough on outsourcing.

Question 12

A company that succeeds in differentiating its product offering from those of its rivals can usually

Accepted Answer

A)  avoid having to compete on the basis of simply a low price. 
B)  charge a price premium for its product (because buyers see its differentiating features as worth something extra). 
C)  increase unit sales (because of the attraction of its differentiating product attributes). 
D)  gain buyer loyalty to its brand (because some customers will have a strong preference for the company's differentiating features). 
E)  All of these. 
A)  avoid having to compete on the basis of simply a low price. 
B)  charge a price premium for its product (because buyers see its differentiating features as worth something extra). 
C)  increase unit sales (because of the attraction of its differentiating product attributes). 
D)  gain buyer loyalty to its brand (because some customers will have a strong preference for the company's differentiating features). 
E)  All of these.

Question 13

The objective of competitive strategy is to

Accepted Answer

A)  provide detail to the company's business model. 
B)  build competitive advantage in the marketplace by giving buyers superior value relative to the offerings of rival sellers. 
C)  get the company into the best strategic group and then dominate it. 
D)  establish a competitively powerful value chain. 
E)  grow revenues at a faster annual rate than rivals are able to grow their revenues. 
A)  provide detail to the company's business model. 
B)  build competitive advantage in the marketplace by giving buyers superior value relative to the offerings of rival sellers. 
C)  get the company into the best strategic group and then dominate it. 
D)  establish a competitively powerful value chain. 
E)  grow revenues at a faster annual rate than rivals are able to grow their revenues.

Question 14

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

Accepted Answer

A)  the extra attention paid to top-notch product performance and product quality. 
B)  their concentrated attention on a narrow piece of the overall market. 
C)  greater opportunity for competitive advantage. 
D)  their suitability for market situations where most industry rivals have weakly differentiated products. 
E)  their objective of delivering more value for the money. 
A)  the extra attention paid to top-notch product performance and product quality. 
B)  their concentrated attention on a narrow piece of the overall market. 
C)  greater opportunity for competitive advantage. 
D)  their suitability for market situations where most industry rivals have weakly differentiated products. 
E)  their objective of delivering more value for the money.

Question 15

Successful differentiation allows a firm to

Accepted Answer

A)  command the largest market share in the industry. 
B)  set the industry ceiling on price. 
C)  avoid being overly concerned about whether entry barriers into the industry are high or low. 
D)  command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand. 
E)  take sales and market share away from rivals by undercutting them on price. 
A)  command the largest market share in the industry. 
B)  set the industry ceiling on price. 
C)  avoid being overly concerned about whether entry barriers into the industry are high or low. 
D)  command a premium price for its product and/or increase unit sales and/or gain buyer loyalty to its brand. 
E)  take sales and market share away from rivals by undercutting them on price.

Question 16

To succeed with a low-cost provider strategy, company managers have to

Accepted Answer

A)  pursue backward or forward integration to detour suppliers or buyers with considerable bargaining power and leverage. 
B)  move the performance of most all value chain activities to low-wage countries. 
C)  sell direct to users of their product or service and eliminate use of wholesale and retail intermediaries. 
D)  do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities. 
E)  outsource the majority of value chain activities. 
A)  pursue backward or forward integration to detour suppliers or buyers with considerable bargaining power and leverage. 
B)  move the performance of most all value chain activities to low-wage countries. 
C)  sell direct to users of their product or service and eliminate use of wholesale and retail intermediaries. 
D)  do two things: (1) perform value chain activities more cost-effectively than rivals and (2) be proactive in revamping the firm's overall value chain to eliminate or bypass "nonessential" cost-producing activities. 
E)  outsource the majority of value chain activities.

Question 17

A company's competitive strategy should

Accepted Answer

A)  be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies. 
B)  be aligned toward being at least an average performer within the industry. 
C)  be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers. 
D)  have the resources and capabilities to incorporate standard attributes into its product offering. 
E)  ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves. 
A)  be well matched to its internal situation and predicated on leveraging its collection of competitively valuable resources and competencies. 
B)  be aligned toward being at least an average performer within the industry. 
C)  be well attuned to doing an outstanding job of satisfying the needs and expectations of niche buyers. 
D)  have the resources and capabilities to incorporate standard attributes into its product offering. 
E)  ensure it is designed to concentrate on a small range of products so it can react quickly to competitive moves.

Question 18

A company's competitive strategy deals with

Accepted Answer

A)  management's game plan for securing a competitive advantage relative to rivals. 
B)  what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on. 
C)  its efforts to change its position on the industry's strategic group map. 
D)  its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward. 
E)  All of these. 
A)  management's game plan for securing a competitive advantage relative to rivals. 
B)  what its strategy will be in such functional areas as R&D, production, sales and marketing, distribution, finance and accounting, and so on. 
C)  its efforts to change its position on the industry's strategic group map. 
D)  its plans for entering into strategic alliances, utilizing mergers or acquisitions to strengthen its market position, outsourcing some in-house activities to outside specialists, and integrating forward or backward. 
E)  All of these.

Question 19

Focusing provides the ability to secure a competitive edge but also it carries some risks that will be detrimental to the focused firm, such as

Accepted Answer

A)  the chance that competitors will not find effective ways to match the focused company's capabilities in serving the market niche. 
B)  the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes. 
C)  the potential for the niche to become so attractive it will not attract new competitors thereby providing excessive market segment profits. 
D)  the likelihood that a focused company will become so cost efficient it will achieve excessive profits. 
E)  None of these are risks worth worrying about. 
A)  the chance that competitors will not find effective ways to match the focused company's capabilities in serving the market niche. 
B)  the potential for the preferences and needs of niche members to shift over time toward mainstream provider product attributes. 
C)  the potential for the niche to become so attractive it will not attract new competitors thereby providing excessive market segment profits. 
D)  the likelihood that a focused company will become so cost efficient it will achieve excessive profits. 
E)  None of these are risks worth worrying about.

Question 20

A firm pursuing a best-cost provider strategy

Accepted Answer

A)  seeks to be the low-cost provider in the largest and fastest-growing (or best) market segment. 
B)  tries to have the best cost (as compared to rivals) for each activity in the industry's value chain. 
C)  tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price. 
D)  seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes). 
E)  seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes. 
A)  seeks to be the low-cost provider in the largest and fastest-growing (or best) market segment. 
B)  tries to have the best cost (as compared to rivals) for each activity in the industry's value chain. 
C)  tries to outcompete a low-cost provider by attracting buyers on the basis of charging the best price. 
D)  seeks to deliver superior value to buyers by satisfying their expectations on key quality/service/features/performance attributes and beating their expectations on price (given what rivals are charging for much the same attributes). 
E)  seeks to achieve the best costs by using the best operating practices and incorporating the best features and attributes.

A differentiation-based competitive advantage

The aim of the best-cost provider strategy is to create a competitive advantage by

The objective of a best-cost provider strategy is to

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when

A focused differentiation strategy aims at securing competitive advantage

A broad differentiation strategy works best in situations where

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

A competitive strategy of striving to be the low-cost provider is particularly attractive when

The chief difference between a low-cost leader strategy and a focused low-cost strategy is

A competitive strategy to be the low-cost provider in an industry works well when

The big danger or risk of an unsound best-cost provider strategy is

A company that succeeds in differentiating its product offering from those of its rivals can usually

The objective of competitive strategy is to

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

Successful differentiation allows a firm to

To succeed with a low-cost provider strategy, company managers have to

A company's competitive strategy should

A company's competitive strategy deals with

Focusing provides the ability to secure a competitive edge but also it carries some risks that will be detrimental to the focused firm, such as

A firm pursuing a best-cost provider strategy

What Is Strategy and Why Is It Important

Charting a Companys Direction: Vision and Mission, Objectives, and Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Cost Position, and Competitiveness

Supplementing the Chosen Competitive Strategy-Other Important Strategy Choices

Strategies for Competing in International Markets

Corporate Strategy: Diversification and the Multibusiness Company

Strategy, Ethics, and Corporate Social Responsibility

Superior Strategy Execution-Another Path to Competitive Advantage

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Exam 5: The Five Generic Competitive Strategies

A differentiation-based competitive advantage

The aim of the best-cost provider strategy is to create a competitive advantage by

The objective of a best-cost provider strategy is to

A strategy to be the industry's overall low-cost provider tends to be more appealing than a differentiation or focus strategy when

A focused differentiation strategy aims at securing competitive advantage

A broad differentiation strategy works best in situations where

Which of the following is not an action that a company can take to do a better job than rivals of performing value chain activities more cost-effectively?

A competitive strategy of striving to be the low-cost provider is particularly attractive when

The chief difference between a low-cost leader strategy and a focused low-cost strategy is

A competitive strategy to be the low-cost provider in an industry works well when

The big danger or risk of an unsound best-cost provider strategy is

A company that succeeds in differentiating its product offering from those of its rivals can usually

The objective of competitive strategy is to

What sets focused (or market niche) strategies apart from low-cost leadership and broad differentiation strategies is

Successful differentiation allows a firm to

To succeed with a low-cost provider strategy, company managers have to

A company's competitive strategy should

A company's competitive strategy deals with

Focusing provides the ability to secure a competitive edge but also it carries some risks that will be detrimental to the focused firm, such as

A firm pursuing a best-cost provider strategy

What Is Strategy and Why Is It Important

Charting a Companys Direction: Vision and Mission, Objectives, and Strategy

Evaluating a Companys External Environment

Evaluating a Companys Resources, Cost Position, and Competitiveness

Supplementing the Chosen Competitive Strategy-Other Important Strategy Choices

Strategies for Competing in International Markets

Corporate Strategy: Diversification and the Multibusiness Company

Strategy, Ethics, and Corporate Social Responsibility

Superior Strategy Execution-Another Path to Competitive Advantage

Filters